Guardian Residential Lending Industry News, May 30 – June 6, 2019

Guardian Residential Lending Industry News, May 23-30, 2019
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In the Know: A Roundup of This Week’s Local and National Real Estate Stories 

Mortgage rates nearly hit a 2-year low and other news this week…

 

Freddie Mac: Mortgage rates nearly hit a 2-year low (HW, June 6)

The 30-year fixed-rate mortgage averaged 3.82% this week

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Low Rates Spark Mini-Boom in Refinancing (Mortgage Daily News, June 5)

The Refinance Index increased by 6 percent from the previous week.  Applications that were for refinancing grew to 42.2 percent of the total from 39.7 percent during the week ended May 24.

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As mortgage rates plunge, millions more homeowners can benefit from refinancing (CNBC, June 3)

There are now about 5.9 million borrowers who could see their rates drop by at least 75 basis points by refinancing their mortgages. That is an increase of 2 million in just the past month, according to Black Knight, a mortgage software and analytics company.

That is the largest population of eligible candidates in nearly three years and represents an aggregate of $1.6 billion in potential monthly savings. Per borrower, the savings is about $271 per month.

The average rate on the popular 30-year fixed has fallen from a recent high of 4.23% on May 21 to 3.94% now, according to Mortgage News Daily.

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Most consumers overestimate what it takes to get a mortgage (HW, June 5)

Fannie Mae survey reveals widespread lack of mortgage knowledge

When it comes to obtaining a mortgage, the majority of consumers think it requires a higher credit score and larger down payment than is actually necessary, according to a recent survey by Fannie Mae.

Of the 3,647 surveyed consumers, most vastly overestimated the requirements to obtain a mortgage. Specifically, 53% thought a credit score of 650 was required, when many lenders actually allow a score of 580.

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Powell says the Fed will ‘act as appropriate to sustain the expansion’ (CNBC, June 4)

Federal Reserve Chairman Jerome Powell said the central bank is watching current economic developments and will do what it must to keep the near-record expansion going.

Financial markets have been nervous lately over an escalating trade war that has spread from China and now could include Mexico. At the same, government bond yields are behaving in a way that in the past has been a reliable recession indicator.

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A $4 Trillion Plan Could Make or Break Dreams of U.S. Homebuyers (Bloomberg, May 30)

Washington says a major change in the mortgage-backed securities market could make home loans more affordable nationwide. Not everyone on Wall Street is so sure.

The revamp, the most significant overhaul of the market in a generation, will virtually eliminate the distinction between bonds issued by Fannie Mae and Freddie Mac, which guarantee nearly half of U.S. residential mortgages. The hope is that blending the two will improve market liquidity and, as a result, mitigate investor risk while helping keep a lid on mortgage costs.

But skeptics warn that the change could actually raise mortgage rates, rather than lower them. The big test starts on June 3, when the first of a new breed of combined security is set to roll off the line. It’s the final step in a more than five-year process to unify a roughly $4.4 trillion pile of agency MBS currently split between the two government-sponsored enterprises.

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NAHB: Biggest roadblock for U.S. home shoppers is high home prices (HW, May 30)

Half of home seekers in the first quarter had been searching for three months or longer

About half of the people who were looking for a home in the first quarter had been searching for three months or longer without success, according to the National Association of Home Builders.

The No. 1 roadblock was high prices, cited by 46%, followed by not being able to find the right property in the neighborhood of choice, cited by 40%, NAHB said in a report based on a survey of 15,401 people conducted during March.

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Home prices will increase 4.7% in the next year, says new CoreLogic estimate (HW, June 5)

CoreLogic is more optimistic than other major forecasters such as NAR and MBA

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Hispanic homebuyers are the future of the U.S. housing market (Curbed, June 4)

By 2030, they’ll comprise 56 percent of all new homebuyers in the country

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Just for Fun

Need a Summer Reading List? These Stanford Business Professors Say These Books Will Boost Value and Success in Life (CNBC, June 4)

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Thanks for reading!